Comparison · Immigration and citizenship
Panama vs Portugal for Retirement or Living on Your Income
Panama vs Portugal for retirees and passive income: visas, type of residency, pension taxes after the end of NHR, currency, mobility and healthcare.
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In short
Panama and Portugal both attract retirees and people who live on their income, but they work differently. Panama generally does not tax foreign-source income and gives pensionados permanent residency from the start. Portugal taxes its residents on their worldwide income and no longer offers the non-habitual resident regime to newcomers, in exchange for living in the European Union. Portuguese law is summarized here only as context.
Side-by-side comparison
| Criterion | Panama | Portugal |
|---|---|---|
| Visa for retirees or passive income | Pensionado Visa (pension of at least USD 1,000 a month) or retired investor | D7 visa, with passive income of at least the Portuguese minimum wage (€920 a month in 2026) |
| Type of residency | Permanent for pensionados; temporary for retired investors | A 4-month visa followed by a renewable temporary residence permit from AIMA |
| Taxes on a foreign pension | Territorial system: generally not taxed in Panama | Taxed under IRS (Portuguese income tax) as a resident's income |
| Special tax regime | Not needed: the system is already territorial | The non-habitual resident (NHR) regime closed in 2024 (it continues only for those already registered); the new IFICI regime is for research and innovation activities, not pensions |
| Currency | US dollar | Euro |
| Mobility | Panamanian residency does not give you the right to live in other countries | The residence permit lets you travel within the Schengen area for short stays |
| Language | Spanish | Portuguese |
| Healthcare | Private health insurance is the norm | Residents can generally access the National Health Service |
Which one suits you?
- Panama usually fits if your income comes from abroad and you want it, as a rule, not to be taxed in your country of residence, if you prefer to live in dollars and if you want permanent residency from the start.
- Portugal may fit if you want to live in the European Union, travel within the Schengen area and access public healthcare, accepting that your pension will be taxed there.
- In both cases, check what happens to your tax residency in your home country (see tax residency). US citizens remain subject to US tax on their worldwide income wherever they live.
Frequently asked questions
Does the non-habitual resident regime still exist?
Not for newcomers: Portugal repealed it in 2024 and keeps it, until its term runs out, only for those already registered. The regime that replaces it focuses on research and innovation activities and does not cover pensions.
Do Panama and Portugal have a double tax treaty?
Yes. If you are resident in one and have income in the other, the treaty decides where each type of income is taxed (see double tax treaties).
What if I work remotely?
Both countries have visas for remote workers with their own requirements. For Panama, see the remote worker visa.
Do I need the same documents?
They are similar: proof of income, criminal record and civil documents, apostilled or legalized and translated (see embassies and consulates).
Official sources
- National Immigration Service of Panama: pensionado and retired investor requirements (in Spanish)
- Portugal visas: D7 residence visa (Ministry of Foreign Affairs)
- AIMA: means of subsistence (in Portuguese)
- Portal das Finanças: non-habitual resident (in Portuguese)
- Portal das Finanças: IFICI (in Portuguese)